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Ashleynd
Level 1

Petty Cash

We started our petty cash fund from Cash sales in our drawer our business made. We have recorded each transaction throughout the year (2020) and now I want to record them through QBO. Petty Cash is always pulled from the cash drawer before the cash is deposited at the bank. How would I set up the petty cash account with a starting balance, if this cash has never been reported into quickbooks?

Solved
Best answer March 16, 2021

Best Answers
ChristieAnn
QuickBooks Team

Petty Cash

Welcome to QuickBooks Community, Ashleynd. I'll share some steps to ensure you're able to set up the petty cash account with a starting balance. I suggest going to the Chart of Accounts page. From there, you'll have the option to create a new account which will be named Petty Cash by clicking the New button.

 

Here's how:

 

  1. Go to the Gear icon ⚙ and select Chart of Accounts.
  2. Click the New button.
  3. From the Account Type drop-down, choose Bank.
  4. In the Detail Type drop-down arrow, choose Cash on hand.
  5. Enter Petty Cash for the account name.
  6. The opening balance will be created when you move money from the checking account by writing a check or transferring funds. If you already have money to use for petty cash, enter the amount in the Balance field and choose the as of date.
  7. Fill in the other necessary field.
  8. Hit Save and Close.

 

 

For additional information, you can refer to this article: Set up and use petty cash. This also provides details on how to manage petty cash in QuickBooks Online.

 

I'm adding this article to further guide you in effectively managing your business using QBO: Help guide for QuickBooks Online. It contains topics about advanced accounting, banking, and payments to name a few.

 

Let me know if there's anything else you need help with. Know that I'm always here to help you anytime. Take care and keep safe!

View solution in original post

Rea_M
QuickBooks Team

Petty Cash

I'm here to share further details about classifying your petty cash transactions in QuickBooks Online (QBO), @Ashleynd. This way, you can keep your account updated and manage your sales accordingly.

 

After creating a new petty cash account as directed by my colleague above, you can enter a sales receipt for the sales received and expense transaction for the expenses made using the petty cash. Then, whenever you take money from the petty cash account and deposit it to the business bank, you'll have to record a transfer in QBO. Here's how:

  1. Go to the + New button.
  2. Select Transfer.
  3. In  the Transfer Funds From field, select the petty cash account.
  4. From the Transfer Funds To drop-down list, select the bank account that the money is going to.
  5. In the Transfer Amount field, enter the amount being transferred.
  6. Edit the Date field.
  7. Enter a description of the transfer in the Memo field (optional).
  8. Select Save and close or Save and new to complete the transfer.

 

I've attached a screenshot below that shows the last six steps.

 

To further guide you in putting cash in and out of your petty cash account, I'd recommend checking out this article: Manage petty cash in QuickBooks Online.

 

Also, I'd recommend reconciling your accounts every month. This is to monitor your business' income and expenses and determine any possible errors accordingly. You can refer to this article for the step-by-step guide: Reconcile an account in QuickBooks Online.

 

Let me know in the comments below if you have other concerns about your petty cash account and managing its transactions in QBO. I'm just around to help. Take care always.

View solution in original post

3 Comments
ChristieAnn
QuickBooks Team

Petty Cash

Welcome to QuickBooks Community, Ashleynd. I'll share some steps to ensure you're able to set up the petty cash account with a starting balance. I suggest going to the Chart of Accounts page. From there, you'll have the option to create a new account which will be named Petty Cash by clicking the New button.

 

Here's how:

 

  1. Go to the Gear icon ⚙ and select Chart of Accounts.
  2. Click the New button.
  3. From the Account Type drop-down, choose Bank.
  4. In the Detail Type drop-down arrow, choose Cash on hand.
  5. Enter Petty Cash for the account name.
  6. The opening balance will be created when you move money from the checking account by writing a check or transferring funds. If you already have money to use for petty cash, enter the amount in the Balance field and choose the as of date.
  7. Fill in the other necessary field.
  8. Hit Save and Close.

 

 

For additional information, you can refer to this article: Set up and use petty cash. This also provides details on how to manage petty cash in QuickBooks Online.

 

I'm adding this article to further guide you in effectively managing your business using QBO: Help guide for QuickBooks Online. It contains topics about advanced accounting, banking, and payments to name a few.

 

Let me know if there's anything else you need help with. Know that I'm always here to help you anytime. Take care and keep safe!

View solution in original post

Ashleynd
Level 1

Petty Cash

We have only used petty cash a small number of times and because of this, it was always a deduction out of the cash drawer. For 2021, we have set a monthly budget and have money separate from the cash drawer.

However, for 2020, how would we classify the transactions when the payout for petty cash was done before the deposit into the bank for sales. I have records of each transaction and how much was taken out but wondering how to show the cash that the expense was taken from. Essentially each month that had a withdrawal would balance out to $0 with no carry-over. 

Rea_M
QuickBooks Team

Petty Cash

I'm here to share further details about classifying your petty cash transactions in QuickBooks Online (QBO), @Ashleynd. This way, you can keep your account updated and manage your sales accordingly.

 

After creating a new petty cash account as directed by my colleague above, you can enter a sales receipt for the sales received and expense transaction for the expenses made using the petty cash. Then, whenever you take money from the petty cash account and deposit it to the business bank, you'll have to record a transfer in QBO. Here's how:

  1. Go to the + New button.
  2. Select Transfer.
  3. In  the Transfer Funds From field, select the petty cash account.
  4. From the Transfer Funds To drop-down list, select the bank account that the money is going to.
  5. In the Transfer Amount field, enter the amount being transferred.
  6. Edit the Date field.
  7. Enter a description of the transfer in the Memo field (optional).
  8. Select Save and close or Save and new to complete the transfer.

 

I've attached a screenshot below that shows the last six steps.

 

To further guide you in putting cash in and out of your petty cash account, I'd recommend checking out this article: Manage petty cash in QuickBooks Online.

 

Also, I'd recommend reconciling your accounts every month. This is to monitor your business' income and expenses and determine any possible errors accordingly. You can refer to this article for the step-by-step guide: Reconcile an account in QuickBooks Online.

 

Let me know in the comments below if you have other concerns about your petty cash account and managing its transactions in QBO. I'm just around to help. Take care always.

View solution in original post

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